The CARES Act 2020 Update: New SBA PPP Application & Guidelines

The CARES Act 2020 Update: New SBA PPP Application & Guidelines

The CARES Act of 2020 Update: Paycheck Protection Program Application and Further Guidance Released

Houston — April 3, 2020  Last night, the Small Business Administration released an interim final rule clarifying and providing supplemental guidance regarding the Paycheck Protection Program authorized by the CARES Act of 2020. Specifically, the supplemental guidance clarifies the following points:

  • For purposes of calculating “Average Monthly Payroll,” borrowers must use the average monthly payroll for 2019, excluding costs over $100,000 on an annualized basis for each employee;
  • Since independent contractors can apply for their own Paycheck Protection Program loan, independent contractors do not count as employees for the purposes of loan calculations;
  • The maturity date on the loan 2 years at a 1% interest rate;
  • Payments are deferred for six months following the date of disbursement.  Interest does accrue during the deferral period;
  • Lenders will be compensated based on the balance of the financing outstanding at the time of final disbursement:
    • Loans $350,000 and under: 5.00%
    • Loans greater than $350,000 to $2 million: 3.00%
    • Loans greater than $2 million: 1.00%
  • Agent fees will be out of lender fees. The agent-lender fee schedule and additional lender guidance is available here;
  • Not more than 25% of the forgiven amount may be for non-payroll costs; and
  • To request loan forgiveness, borrowers must submit a request and provide supporting documentation to the SBA lender servicing the loan. The lender must make a decision on the forgiveness of the loan within 60 days.

As of today, April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses. Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover payroll and other certain expenses.

The most recent Paycheck Protection Program application is available here. Further guidance issued by the

Treasury Department for borrowers is available here. All eligible recipients should seek guidance from their SBA lender regarding the documents required to apply for the program.

We encourage all of eligible recipients to apply for the Paycheck Protection Program as soon as possible, as the funds are being disbursed on a “first come, first serve” basis.

For more information please contact any of the attorneys below:

Patrick Hayes

Champe Fitzhugh

Josh Harrison

Mahek Bhojani

Patrick Kelly


Celebrating 30 Years in 2020

Founded in 1990, with offices in Houston and Austin, Andrews Myers, Attorneys at Law, is a corporate law firm and recognized market leader in Texas construction law.  The firm focuses on the concentrated disciplines of commercial litigation, construction, commercial real estate, corporate and business transactions, with additional emphasis on related issues including bankruptcy and insolvency, energy, employment and capital formation. A seasoned team of attorneys provides timely and cost-effective solutions to the most complex problems facing entrepreneurs and middle-market industry leaders throughout the state and the nation. For more information please visit

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